The latest currency war escalation does not come from any of the usual suspects (the Fed-PBoC-BOJ-ECB-SNB hate pentagongram) but from non-axis player Brazil. And it's a doozy - the country's top economic officials have decided to cancel their trip to Seoul in what is likely the first jarring demonstrating of defection from the G-20 cartel. The reason for this last minute defection from the Central Banking proletariat , as given by Finance Minister Guido Mantega and cited by Reuters, is, appropriately enough: "currency issues." Nuff said. And while Mantega has decided to pay a last minute cancellation fee, he is not alone - the president of the central bank Henrique Meirelles has also withdrawn from the list of attendees, due the totally unforeseeable event of monetary policy meetings to be held on Tuesday and Wednesday. Obviously those were unheard of when the G-20 was scheduling the time and date of its location. Next up on defection watch: Hildebrand and Shirakawa. It will go oddly elegant in addition to the (FX) suicide watch they have been on for about a week.

Brazil's top economic officials will not be attending meetings of Group of 20 finance ministers and central bank governors in South Korea this week, the finance ministry and central bank press offices said on Monday.

Finance Minister Guido Mantega canceled his trip because of currency issues, the press office confirmed, adding that he had just come back from an international trip and would be accompanying President Luiz Inacio Lula da Silva to the Group of 20 leaders meeting next month.

Reuters reported on Friday that Mantega would not be attending the meeting and would unveil new currency measures aimed at containing a rapid rise in the real BRBY this week. For more see [ID:nN15261854].

Central Bank President Henrique Meirelles will also not be attending the G20 this week because the bank holds its monetary policy meeting on Tuesday and Wednesday, the press office of the central bank said.

Latin America's largest economy has sought to project itself onto the international stage in recent years, and the G20 has been an important forum for its increasing clout as a major emerging market.

Brazil also holds presidential run-off elections on Oct. 31.

And just in case there was any confusion what the real reason for the last minute no show is, we also learn from Reuters that in an attempt to prevent the ongoing surge of the real, Brazil has raised the tax it charges foreigners on local purchases from 4% to 6%.

Brazil will raise the tax it charges foriegners to buy local bonds to 6 percent from 4 percent currently, Finance Minister Guido Mantega said on Monday.

The move is aimed to help curb a recent rally by the local currency, the real BRBY.

In other news, Brazil did not buy dollars today. We are not so sure about Peru or the other 20 countries which are now engaged in FX crossfire.

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(Reuters) - Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health.

"It is not going to happen in this country." Geithner told Silicon Valley business leaders of devaluing the dollar.

It's either the fuckin bitch ass world ACCEPTS the collapse of the US consumer and accedes to a normalization of trade flows or they FUCK OFF.

We CANNOT repay the debts, do they fucking GET THIS? We also CANNOT continue to suffer their mercantilist ponzi currency bullshit. If we CANNOT repay the debts, it is sure as shit not time to rack up more. The entire EM world is developing on the back of debt they bitch about our not paying but they bitch even worse if we won't borrow it.

If we STOP the debts, their stupid debtbubble economies collapse. If we debase, they whine about that too. The world is full of bitches.

The specific INTENT of the mercantilist ponzis of Japan and China was to take our production capacity. Ok, DONE. Now what? We can no longer produce enough to pay for the goddamned goods and neither of these two stupid idiot nations wishes to let US actually sell anything in THEIR markets.

Typical American, blaming others for the mess USA is in. American business leaders themselves outsourced their own industrial base to boost the bottom line, for short term at least.

To boost that bottom line, they kicked in the teeth American blue collar workers in any way possible and thus, allowed imports to skyrocket, thanks to the outsourced factories.

3rd world said thank you for the opportunity and now they are ready to make their move, 15 years later. USA is not that important even for China. T-bond holdings of China has actually gone down by 100 billion dollars during last year.

USA is just another has-been drunken ex-superstar, suffering from delusions of grandeur. You guys just fucked up your own game.

Japan and China were playing for keeps and ended up with all the marbles. Who let them do that?

The problem is that in the United States it's racist, intolerant and unfair to say that we have a collective interest or that we should work together to protect what's ours. People still think we'll be rich and strong forever and no one can ever take it away from us. So it's only fair to the disadvantaged people of the world that we continue to give everything away.

Well guess what happened. The Chinese (I live in China, I get this regularly) are no longer in awe of us. They're pretty contemptuous of us in fact. They know they've won, and they know they beat us fair and square.

They haven't won until they can rule without facism, which they cannot do yet. They are standing on the backs of a slave class and will have to find 'boogie men' in the world to focus public attention on to survive as a political system. China has never proved they can provide an environment that fosters long term stability. Without big changes, popular unrest is still assured. When they lose the US and EU consumer markets over the next few years, we will see what they have 'won'. My guess is a huge, pitchfork toting mob.

The US is turning to facism to rule and our citizens are in debt up to their eye balls. China has avoided turning their citizens into debt slaves, even if they are slaves to the CCP.

Define 'long term stability'. China has been around for thousands of years, allbeit under various forms of government. The US government has been around less than 250 years and is looking very shaky now.

Without big changes in the US popular unrest is assured. Fixed that for you.

The US and EU consumer market middle class is dying as you make a prediction that China will 'miss these consumers'. Hey, China will develop trade with other countries that are more economically stable than the US and EU.

China is negotiating trade with various countries using their local currencies. They don't need no stinkin dollars and as time goes by fewer coutries will have use for dollars.

Once QE runs it's ruinous course to save the elite, Western economies will be a smoking pile of crap. Why would China want to continue trade with countries that issue trillions of funny money? China's internal consumption will increase in time and China will continue to develop trade relations with commodity rich countries...not countries that have squat to offer...save monopoly money.

Intel Corp. said it plans to invest between $6 billion and $8 billion on upgrading its manufacturing technology in U.S. facilities, including building a new plant in Oregon.

The upgrades are set as Intel looks to produce its next-generation 22-nanometer microprocessors in four existing factories in Arizona and Oregon, along with the new facility that is scheduled for research-and-development startup in 2013. The new chips will enable sleeker device designs, higher performance and longer battery life at lower costs, Intel said.

"These investments will create capacity for innovation we haven't yet imagined," said Brian Krzanich, the general manager of Intel's manufacturing and supply chain.

The company said the upgrades will result in 800 to 1,000 permanent high-tech jobs as well as 6,000 to 8,000 construction jobs. Intel employs about 83,000 people.

Last week, Intel said its third-quarter profit climbed 59% as increased corporate spending on new technology helped to ease pressure from weakened demand for personal computers.

Please ... can anyone explain to me why this comment is being junked? I mean, yes, certainly, the writer could have chosen less colorful metaphors to express his thought, but the thought itself appears to be one worthy of debate.

The rest of the world is starting to make their move. They know what is happening in the US and they don't like it. If they want a currency war, it looks like the other countries are going to do it also.

They HAVE been engaging in currency "war" for decades! China and many other nations effect de facto or explicit PEGS to the damned dollar to ensure that their currency does not appreciate when it SHOULD due to trade imbalances.

The whining from all the BRICs except Russia is hypocritical and laughable in the extreme.

The whining from all the BRICs except Russia is hypocritical and laughable in the extreme.

I don't know Trav. The Russian CB has recently went on record to state that it was cancellin it's 'currency corridor' (basically a level to which the CB tries to peg the RUR). It would mean there is to be more volatility expected. And all we're seeing is the RUR slowly devaluing even compared to the falling USD and EUR since then.

So it was just a smart ploy to continue engaing in currency wars, while trying to look 'fair' to the West. Remember, Russia is a predominantly export-oriented Oil&GAS economy, and it stands to lose big time if the RUR appreciates. The Russian Goverment showed that it can't allow that with the rapid devaluation of the RUR in the end of 2008 (fuck the millions of citizens living hand-to-mouth, we have our own interests to take care of).

So I just don't know why single out Russia. They don't whine on the currency issue, true. But that doesn't mean they aren't doing (or ready to do) what their BRIC peers are. They are just keeping their cards to themselves, is all.

Sounds to me like the next step will be the REFUSAL to buy the crap paper we're shoving out throught the auctions. Maybe we'll just continue buying British crap if they buy our crap and then have the banksters execute secret swaps in Bermuda.

Brazil’s Real has added 1.2 percent since the tax increase was announced on Oct. 4, Brazil last week doubled a tax it charges foreigners on investment in fixed-income securities to 4 percent to curb appreciation in the real.

South Korea’s won strengthened 1.2 percent since Oct. 5, when regulators said they will start an audit of lenders handling foreign-currency derivatives on Oct. 19, through yesterday. The won today dropped 1.3 percent on concern the Bank of Korea will intervene to curb gains.

Indonesia’s central bank said on June 16 it will require investors in one-month bills to hold the securities for at least four weeks. The rupiah has appreciated 2.3 percent since then.

The reason for this last minute defection from the Central Banking proletariat, as given by Finance Minister Guido Mantega and cited by Reuters, is, appropriately enough: "currency issues." Nuff said. And while Mantega has decided to pay a last minute cancellation fee, he is not alone - the president of the central bank Henrique Meirelles has also withdrawn from the list of attendees, due the totally unforeseeable event of monetary policy meetings to be held on Tuesday and Wednesday.

No reason to go all Dwight Shrute here, I'm sure this is easily explained by a rescheduled thong parade or something.

Tariffs will destroy China, will destroy manufactoring/ jobs market....China has been using tariffs for years blackmailing business to enter partnerships to be able to sell product into China.

Pay backs are a bitch, they can not afford high unemployment when they are trying to bring 300 million off the farms.See the pollution has destroyed tons of rivers ect and this has also destroyed tons of farming (no clean water for irrigation) so you have farmers with nothing to go back to the land is destroyed.

China isn't Japan, it doesn't depend on exports to survive. China is completely self-sufficient in absolutely every regard and now owns most of the worlds money too. They could build a wall around the whole country tomorrow and get along just fine.

A couple of years back, when I first started mentioning to friends that the days of US World Reserve Currency status were numbered, I was laughed at and essentially called a heretic.

Just recently, when I suggested that, instead of 2020, the new global reserve currency would be unveiled as soon as 2015, I was dismissed as a lunatic and conspiracy theorist.

I now believe the timeframe may be even shorter. Events are spinning rapidly out of control. Even in a world where fiat are only indexed against each other, the US$ will, by this winter, make new all-time lows below 72 on the USDX. As debt and fiat base continue grow exponentially, the time horizon to global financial revolt shortens.

In the immortal words of Hans & Franz, hear me now and believe me later: Not only is the end of The Great Keynesian Experiment upon us, so is the end of US$ hegemony. The void will be filled by a partially asset backed, globally-recognized SDR. The United States, left with no options, will comply and participate. The US$, though still the currency of the "homeland", will necessarily cease to be the global unit of exchange. All of this by the end of 2013.

Central Banks of USA, Europe, Russia, China & others are holding 90% (or so) of all Iraqi Dinars auctioned by the Central Bank of Iraq. Most of Iraq's external debt has been crossed off--including China which cancelled 80% of Iraq's debt with them. This is Biblical...buckle up!

How wild do you expect it to get before the new year? I ask because my dad recently cleared his 401k (hit 59 1/2), but my mom was planning on waiting till Jan for tax reasons and to cash out a years worth of vacation. How crazy will it get before Jan 3? And yeah they got spooked by the blues sniffing around retirement accounts.

Shame: Before year end, I'd expect nothing more than continued volatility in FX and gold with increasing volatility in equities. It would not surprise me at all here if the $ were to rally, if only because a euro at 1.40 has proven in the past to be too much for Merkel et al to handle.

Your folks are in a tough spot. At 60, they need all the help they can get but they should trust no one at this point as 99.8% of "financial advisors" have absolutely zero comprehension of what truly lies ahead. As long as you keep reading ZH, the advice you'll give will be the most important they receive.

sure looks that way to me Turd, but a Republican landslide in Nov could get enough populist minded folks in DC to pull the skirts up on the BIS/IMFs plan. Rand Paul and others may be able to get enough face time on Beck to keep the US from supporting an SDR/Asset backed basket reserve. It doesn't seem to me there is enough chaos yet for such a large change to rise out of, that takes more panic in the herd.

If global trade was balanced, i.e., if no one ran a huge current account surplus or deficit, then there would be no crisis. Asia has accumlated insanely large FX reserves over the last ten years, compliments of the US which has accumulated insanely large deficits.

That horse is now out of the barn. China is the biggest surplus accumulator. They need to focus on their own population. Why are they sending their capital to the West when they have hundreds of millions in poverty? If I was a cynic I'd say because it is more profitable to the CCP oligarchy. But no worries for China, their 371 Central Committee members have just finished laying the plans for the next five years.

The US also needs to focus on its own population. Or as Robert Plant sings, "Bring it on home ..."

"Asia has accumlated insanely large FX reserves over the last ten years"

The Fed is also doing a bang up job of accumulating various bs asset classes. The Fed US Treasuries holdings are now greater than those of China. Not to mention all the other bs assets they have accumulated.

I'm not saying that's a good thing. However, the FED can hold that crap on the balance from here to eternity. China might have to as well, but at this rate what they hold might not even be worth the effort of redeeming ...

Ok, a little hyperbolic. Point is, current dollar devaluation is one way to ratchet up the pressure on our Chinese friends to let their currency value up ... while also lessening impact of a Chinese "nuclear option" of dumping their holdings.

“This currency war needs to be deactivated,” Mantega told reporters. “We have to reach some kind of currency agreement.”

Countries including China and Turkey are seeking to stem appreciation in their currencies to gain a trade advantage, roiling financial markets and prompting Mantega’s call for a coordinated global response.

Mantega cited the Plaza Accord of 1985, when governments agreed to intervene to devalue the U.S. dollar against the yen and the German deutsche mark, as the kind of agreement that might be required. International policy makers failed to narrow their differences on intervention in currency markets during the International Monetary Fund’s annual meeting this month

Brazil ought to lead the southern hemisphere in a movement to secede from the rest of the planet, i.e. to decouple from the northern hemisphere. Join with Australia, New Zealand, Chile, the rest of South America, hell all of resource rich sub-Saharan Africa (lots of work to do there, but they're not much worse off than most of South America was about 35 years ago). They could learn from the mistakes of the north and happily go it on their own, while the folks of the northern hemisphere eat each other alive.

In any case, for the future, look south (unless you're already there).

You're right about their relative military weakness. Today. But they could have a whole hell of a lot of firepower in a decade, if they made a firm decision to do it. The question is: Will they be allowed to fully develop themselves, including militarily, while they decouple? The northerners might soon have their hands full going at each others' throats.

Then again, maybe the western hemisphere ought to tolerate the US, because of its firepower, and tell the eastern hemisphere to go soak its head. In any case, I'm going longer and longer SA.

Check this image often...you will see cloud fronts with straight edges and 90 degree angle corners when the military conducts exercises. I saw when Gustaf was disintegrated with two parallel chemtrail shots--like torpedoes! Come often to NOAA & witness the Monroe doctrine at its best!